Four steps retailers can take to improve their cloud security

Insights

• Cloud technology offers retailers advantages such as better customer engagement, more responsive e-commerce platforms, and improved supply chain management.
• However, storing sensitive customer data in the cloud can attract cyberattacks. This has become especially prevalent in the ANZ region.
• Retailers need to address security concerns by collaborating with experienced cloud providers, ensuring regulatory compliance, performing regular audits, and implementing strong cloud governance policies.

Customer data is a double-edged sword for retailers. One on hand, it is a rich source of insights they can use to create memorable experiences for their users. On the other, this kind of data is a target for cyberattacks.

Data breaches have been on the rise in the ANZ region, particularly in the last 12 months. The average costs incurred from data breaches have increased for the retail sector globally, and businesses will be dealing with the repercussions for years to come. So how can retailers in ANZ – and around the world – store and manage their customer data securely? The answer is cloud.

Boon for retailers

The majority of respondents in retail, surveyed for Infosys’s Cloud Radar CPG and Retail Industry Report, anticipate an increase in their cloud spending this year. Cloud spending in Australia alone is set to reach $14 billion in 2025. The aims for this increased spending range from a desire to grow revenue, scaling operations in a race for agility, and building responsiveness to constantly changing customer needs.

The benefits from cloud for retailers are plenty:

• Improves customer interactions: The Infosys report shows that retail companies are likely to use cloud the most for digital commerce and customer relationship management (CRM). It lets them store a vast amount of data related to customer demographics and purchases, and use it to personalize solutions to customers’ needs, thus driving sales. For example, retailers are using cloud-native omni-channel solutions to provide virtual try-on technologies on their e-commerce sites, to make shopping convenient for customers.

  Cloud’s auto-scaling ability makes it easier for retailers to manage seasonal increase in online traffic on their e-commerce sites.

• Enhances e-commerce: Cloud allows for lower latency, meaning e-commerce websites are more responsive and engaging for customers, encouraging repeat visits. Additionally, cloud’s auto-scaling ability makes it easier for retailers to manage seasonal increase in online traffic on their e-commerce sites. Australian consumer products company Hanes Australasia is one of the companies using cloud to improve customer experience.
• Elevates supply chain coordination: Cloud allows retailers instant access to data and analytics related to the demand for products, helping them predict future demand and manage stock levels. Woolworths Group’s cloud transformation has helped improve its operational resilience and enhance customer experience, while New Zealand’s The Warehouse Group also has a cloud adoption success story to tell.

Cloud can transform retailers’ operations, making them responsive to customers’ needs. However, there are also security challenges associated with cloud.

Security challenges posed

There are risks associated with cloud, and retailers must have a clear understanding of those. Retailers need to make sure they control who can deploy new cloud infrastructure. Data breaches can happen when more individuals than necessary are allowed access to deploy cloud infrastructure or applications: 41% of Retail respondents in the Infosys study said that any department head or IT manager was allowed to spin up a new cloud provision, making it even more difficult for security teams to have clear oversight of their entire cloud estate.

Another concern is when companies fail to comply with region-specific data security regulations. Not complying with security protocols could lead to a risk of data breach.

What retailers can do

There are four steps retailers can take to improve their cloud security:

• Instead of attempting to tackle cloud on their own and learning by trial and error, companies can leverage the expertise and resources of experienced cloud service providers for their cloud transformations.
• Retail companies need to make sure they understand the risks associated with any technologies they plan to deploy, such as beacons and point-of-sale terminals, and work with their cloud providers to ensure secure integration and management of those processes into the business.
• Regular audits and updating is a key approach to mitigating security threats, and retailers should work with their cloud providers to optimize these. Additionally, retailers must have effective monitoring in place to flag potential threats and report breaches. All of this helps build the resilience necessary to respond to threats and recover from setbacks.
• Companies need to develop a cloud governance strategy with clear protocols for ownership, procurement, oversight, and data management. This will ensure that only those authorized have access and can make decisions related to cloud deployments, strengthening security.

Cloud is a key part of retailers’ growth and resilience – but firms must also understand the risks and manage them to get the most out of their cloud deployments.